The BPA as we all know provides circulation audit services for the publishing industry and is planning to introduce a private ad network for B2B publishers as part of their services for their over 900 clients worldwide with 60 in Canada. The selling points of programmatic media buying is that it supposedly provides better targeting of web display ads based on demographics such age, gender, income and geographic variables. This process is all automated and is bought in real time through a bidding process and enables the advertiser to tailor the message to the reader and create a more personalized message.

To the uninitiated here is a definition of the terms in the ecosystem according to IAB Canada. (To get a detailed glossary it is available at this link.)

Agency Trading Desk (ATD) – A department or arm of an Agency that oversees programmatic buying. Many Agency holding companies have trading desks. A Demand-Side Platform (DSP) is technology used to manage and optimize ad campaigns. ATDs work in combination with DSPs.

Demand Side Platform (DSP) - A DSP is a technology platform through which buyers (Advertisers or Agencies) can plan, target, execute, optimize, and analyze digital media buying programs across 100% of the media plan. Through a DSP, the buyer can set targeting criteria, pricing, frequency, and other criteria governing the purchase of digital ad units.

Advanced DSPs will provide additional capabilities to the buyer, including integration of various online and offline data sources, the ability to provision direct media buys (as opposed to just Programmatic), advanced optimization and decisioning capabilities, and creative tools

Ad Exchange - A virtual marketplace where participating suppliers auction their impressions to eligible buyers. The ad exchange announces each impressions, in real time, and asks buyers if they are interested to buy said impression and at which price.

Supply Side Platform (SSP) - An entity which facilitates the sale of a publisher’s inventory through an ad exchange. SSPs offer services such as minimum bid requirements, etc.

Ad Network - An Online aggregator or broker of advertising inventory for many sites. Ad networks act as sales representatives for the websites within their networks, whereby ads are bought centrally by media buyers and displayed on multiple websites that contract with individual Ad Networks, for a share of revenue generated by ads served on their site.

Data Management Platform (DMP) - A centralized system for gathering first-party data, integrating with third-party data, and applying this data to one's advertising strategy. Advanced DMPs offer users the ability to create custom segments, forecast segment volumes, sync segments with other sources, overlay advanced analytics, and are often integrated with or part of DSP platforms.

It has been estimated that publishers will get 40% of the proceeds of the ad sale with the rest going to the ad agency and technology companies. According to the World Federation of Advertisers (WFA) here's how the advertising dollar is split . First, your media agency takes about 5¢ in service fees. Then their trading desk takes about 15¢. Then their Demand Side Platform (DSP) takes about 10¢.

Next, some other ad tech middlemen take about 25¢ for targeting, data, and verification. Then an Ad Exchange takes about 5¢.

Now I can see why the ad tech is promoting the heck of this concept, as they will get 40% cut of all the action. Based on this math why would a publisher join this network as they got 85% of the cut before, with the agency getting 15%.

While this sounds good on paper, is there a limitation on what an algorithm can do?My question has always has been how does the algorithm find out the demographics of a reader and not step over the line on privacy issues while the person is surfing online, which contributes to the growing use of ad blocking in my opinion. My feeling is this predicative marketing approach will have a high failure rate and will be wrong in many cases as it is based on the surfing habits and cannot predict what a person’s true intentions are as there are too many variables that are not factored in. I remember the story of a colleague telling me about a book they were reading and sharing this on social media and all of sudden they were getting ads to buy that book.

This excerpt from the keynote speech from Mark Pritchard from Proctor and Gamble at a recent IAB Conference on January 29 on the state of ad networks in the B2C segment suggest there is more work to be done also as ad fraud is a growing concern.”We have a media supply chain that is murky at best and fraudulent at worst. We need to clean it up, and invest the time and money we save into better advertising to drive growth. It’s time we come together, put down our finger-pointers and solve these problems – all of us – marketers, agencies, publishers, ad tech platforms, suppliers. Frankly, this is a matter of collective will. Because surely if we can invent technology for driverless cars and virtual reality, we can find a way to track and verify media accurately.” You can read the whole speech at this link

With all these issues facing the industry the BPA is creating an ad network that deals with these concerns, as it will be offering a transparent and measured ad network for the B2B segment. This private ad network will differ from other consumer based ad networks as it will be fraud free as all publishers will have an audit statement for proof of audience. One of the key benefits of this network is that it can deliver scale to advertisers, as a lot of B2B publishers do not have sufficient traffic sometimes to attract certain advertisers. On the wish list of many B2B publishers is to attract consumer brands like cars, financial services and other consumer products using the demographics of the readers as a selling point ie: business professionals with above average incomes like lawyers. accountants, professors, real estate brokers etc. The problem has always been that the reach of a single B2B publication was too small to be considered by advertisers and with this network this objection will be solved.

This network will offer advertisers 3 ways to buy. First is the direct sell of media brand, an industry buy such as the auto sector and lastly the audience buy based on job titles or demographics like Men 25-54. Publishers can provide unsold ad inventory to the network for this program without fear of cannibalizing existing sales as the rates/CPM offered to clients can be protected to ensure that your direct clients still get the best deal as a floor price is part of the publisher controls. These controls also include a whitelist and blacklist of advertisers, so you will not get for example ads that do not fit your brand profile or editorial standards.

The BPA estimates that each publisher may have up to 50,000 ad impressions each month to sell of unsold inventory that can fetch $25 -$50 CPMs or more depending on the publisher. If you are using Google Ad sense as you secondary source of online ad revenue this may be an opportunity to generate more revenue as the ads are sold by impression and not by clicks and publishers have more control on what ads are featured.

I asked Glen Ashworth from University Affairs on his thoughts of the new B2B ad network and he states “University Affairs has used several banner ad networks for unsold ad inventory over the years, with limited success. The low CPMs and questionable ad creative being served were big problems. A private ad exchange could offer better inventory, more publisher control and more transparency. Most importantly, advertisers will feel that their brand are in a safer web environment. The ad network revenue split does seem to be on the low side for publishers compared to what you can get with a direct buy. However, small publishers are often not even on the radar of big clients (like the automotive and financial services industries) for direct buys. So it’s a case of getting a little piece of revenue via a network vs. nothing at all. “

The limitation of any ad network is that it does not encompass what is called in the industry an integrated media buy that includes the magazine in print and digital, email newsletters and web display. Native advertising and email newsletters are on the future roadmap for this service. This private network will be launched in the 2nd quarter this year and it looks like a great opportunity for publishers as they can now have what you never had before and its is called scale that can compete effectively with the other ad networks that can delver millions of impressions and can provide advertisers with a one-stop buying service for multiple B2B websites.

Martin Seto is the principal of Reflex Media, a media consultancy practice offering media owners digital publishing, event management and ad sales help. His media expertise also include working with ad agencies as a media buyer/planner for tv, radio, print, outdoor, magazine and online. He has been in the advertising and media industry for 25+ years and he has been an instructor/speaker with Centennial College and at magazine conferences across Canada. He can be reached at marty(dot)seto(at)
reflexmediasales.com or 416-907-6562, and on LinkedIn.